In any sale of property, and in particular property in which simple possession does not necessarily imply ownership, the purchaser is concerned about obtaining proper title to the purchased property. In the sale of real property, this concern is normally addressed through the use of a title insurance company, which generally handles the closing transaction for the sale, as well as ensuring that the seller passes clean title to the buyer in the sale. In the context of other items of property, however, use of a title insurance company may be unnecessary, and in fact often renders the sale transaction unduly burdensome and expensive.
Nonetheless, there are some items of personal property for which the purchaser would like to ensure that the purchaser is receiving clear title in conjunction with the purchase. An example of such item is a vehicle, because of the relatively high intrinsic value of vehicles, the relatively high probability that a vehicle that will be encumbered with a security interest, and the titling requirements of most jurisdictions, the implication of which is that merely exchanging possession of the vehicle from seller to purchaser does not necessarily transfer ownership of the vehicle.
In transactions in which the purchaser requires a loan to purchase the vehicle, the purchaser's lender (e.g., a bank, credit union, etc.) may have an interest in ensuring that the purchaser receives clean title and therefore may impose requirements to that effect on the transaction. On the other hand, if the purchaser wishes to pay cash for the vehicle, there is no entity involved in the transaction to ensure that the purchaser is receiving clean title as part of the transaction. In many cases, the purchaser him- or herself may be able to impose requirements upon the seller to ensure that the vehicle is unencumbered prior to paying for the vehicle, but many purchasers lack the sophistication to impose such requirements, and even if the purchaser does have the requisite sophistication, such requirements may be burdensome for both the purchaser and seller, and may in fact unnecessarily delay the transaction.
Hence, there is a need for tools to facilitate the sale of property (including, but not limited to, items of personal property, such as vehicles), especially where there is some question about the purchaser receiving clean title to the property. Ideally, such tools would enhance, rather than detract from, the ease and/or efficiency of the transaction, while ensuring that the purchaser does in fact receive clean title to the property.